MALAYSIA’S foreign direct investment (FDI) improved in the fourth quarter of last year, registering a net inflow of RM12.9 billion compared with the RM4.3 billion recorded in Q318.
Bank Negara Malaysia’s (BNM) Quarterly Bulletin for Q418 said FDI inflow was channelled mainly into the manufacturing and non-financial services sectors.
It said the direct investment account registered a net inflow of RM2.1 billion compared with the RM500 million recorded in Q318.
However, said BNM, the financial account recorded a net outflow of RM6.1 billion against a net inflow of RM2.3 billion in Q318.
“This was due to higher net outflows in the portfolio and other investment accounts, which more than offset the net inflows of direct investment during the quarter.”
Meanwhile, direct investments abroad (DIA) by Malaysian companies recorded a net outflow of RM10.8 billion in Q418 compared with the RM3.8 billion recorded in the previous quarter.
DIA outflows were channelled primarily into the mining and non-financial services sectors.
The portfolio investment account registered a net outflow of RM5.8 billion from a marginal net inflow of RM1 billion in Q318.
“This reflected a turnaround in residents’ portfolio asset transactions, following higher purchases of equity securities abroad,” said the central bank.
Non-residents recorded a smaller outflow of portfolio investments, amounting to RM2.5 billion, compared with the RM3.6 billion recorded in Q318.
BNM said this was due to a net liquidation of equity securities, amid heightened global financial market volatility.
The other investment account recorded a net outflow of RM1.8 billion against a net inflow of RM1 billion in Q318.
“This was attributable to outflows following the maturity of interbank deposits within the domestic banking sector and trade credits, which were partly offset by inflows from the maturity of currency and deposits, and the repayment of trade credits to the private sector.”
Net errors and omissions amounted to -RM10.8 billion, or -2.2% of total trade.
BNM’s international reserves amounted to US$101.4 billion (RM405.6 billion) as at end-December 2018, compared with the US$103 billion as at end-September the same year.